Interview – Keith Hamilton

That in fact is why we moved to dispose of the Wentworth Hotel. The return on the hotel simply did not match the return we could get by putting the money to other uses.

JS: If the motive is now profit, what was it before?

KH: The motive was always profit but profit in the past was perhaps inhibited to some extent because we did not look at all our assets in the manner we are looking at them now.

JS: You are talking about property on the ground and aeroplanes. There have been some suggestions that as well as the Wentworth and the present headquarters, you might also sell the new Qantas building.

KH: No decision has been made about that. It is in the future. The building is not finished so we cannot consider that until it is finished.

JS: What has been the reaction among other airlines in the marketplace to the new style of operations by Qantas?

KH: Generally we have had a good response. I think there is an understanding now among the other airlines that Qantas is not going to sit back and do nothing while they discount and use their marketing techniques. And given that realisation, there are signs of a little more sense corning into the market. Ridiculous discounting is disappearing.

Discounting will never disappear. It is there forever. But it is one thing to discount within the limits of profit. It is a different thing to discount fares by 30 or 40 per cent in order just to fill seats.

JS: Considering we are a relatively high-cost country and from that point of view, in terms of wages, you are certainly not one of the cheaper carriers, we live in a region of lower wage costs. How much does that affect your operations in this region?

KH: Wages is a big factor. Wages and salaries probably amount to about 30 per cent of our total costs. But our productivity is considerably better than most of the Asian carriers and certainly considerably better than most of the European carriers, so there is some offset in productivity. That has to be improved further of course.

There is also perhaps some offset in interest costs. Some of the carriers that operate in Australia pay a great deal of interest for their money. We generally are seen as a little better in risk terms and therefore we have reasonable financial arrangements.

JS: What about insurance costs? There was an argument at Lloyds in London recently about the rate for renewing insurance on the Qantas fleet. Do you know if the cost of your insurance is significantly lower than some other carriers?

KH: Our cost of insurance has always been reasonable because of our operational record. Insurance is a very competitive market and hopefully by, as in advertising, throwing the market open – we do not use the same broker any more than we use the same advertising agency – we have been doing that currently and we would hope the outcome will be a further small reduction in our insurance premiums.

JS: How does your staff productivity compare with the American carriers?

KH: You have to divide the Americans into two or three categories. First and foremost you can basically forget the relatively small US carriers. If you set aside the big cargo carriers in the US – cargo is not labour intensive – then generally what you are looking at in the US is productivity around around 330,000 ATKs (available tonne kilometres) per employee. I would hope we would get up around 260,000 in this corning year and climb into 300,000 within the next few years.

That compares with European carriers generally around 160,000. British Airways, if they get rid of 10,500 people will probably be about 190,000. Air New Zealand’s last published report shows they are about 120,000.

So, weight for age, our employee productivity is not bad.

JS: What means are you using to gain improvements?

KH: We have been going over Qantas using the services of Cresap, McCormick and Paget who are Chicago-based management consultants. We have been looking at various parts of our organisation and comparing it in great detail with a number of fairly efficient foreign airlines.

We have looked at our flight kitchen in Sydney for example.

We have compared that with about 16 foreign flight kitchens and found that it is pretty efficient. We have compared our engineering and maintenance group with people like North West, Japan Air Lines, Lufthansa and others and found we are pretty efficient there.

Nevertheless, we have found in some areas better ways of doing things.

JS: I believe these consultants are known to Qantas staff as ‘Crunch, Munch and Punch’. I gather the full report has yet to be submitted but there have been some interim changes in various areas – there has been a bit of a shuffle in data processing for instance.

KH: There have been changes in a number of areas and this also relates to the fact that there has been a lot of management development over the last seven or eight years in Qantas and a group of new, younger, well-qualified people has now emerged with adequate experience and to a considerable extent they are being fitted into the new organisation.

JS: You mentioned advertising. I have heard some people mention that the latest series of Qantas advertisements is very much a show-the-flag type operation with kangaroos bounding through the bush. To which the competition has responded with ‘Patriotism is not a good reason to wait a day’ etc.

Why does Qantas stay with patriotism and waving the flag in its advertising?

KH: I think the advertisement which has been seen so far is only the first in a long series of advertisements and it has emerged as the result of some very deep market research that both the agency and our own marketing people, using professional organisations, have conducted.

They have actually asked a lot of people how they react to different forms of advertising. For example, perhaps a minor matter, but the koala bear, which is highly successful in North America and has gone down very well in northern Europe, is a complete failure in Australia.

JS: I believe it has been quite an incredible success in north America.

KH: It won a prize in Berlin the other day from about 680 entries.

JS: Does that suggest then that there are still a lot of Morns and Pops in the Australian public to whom flying is still a special, somewhat mystical, almost space travel type of thing and the idea of pushing the Qantas patriotism is that Qantas may still have a special place in their hearts despite all the immediate criticism?

KH: I think Qantas has a love-hate relationship in the community. But Qantas has to earn its customers – not just by advertising. Obviously, it is a matter of efficiency standards of service and so on.

JS: One of the reasons, I assume, for the current downturn in UK-Europe business is the pure length of the trip and therefore the cost. Obviously, the development at the moment is taking place mainly in services to Asian areas. I am interested in where you see your future business in the package tour and cheaper fares market compared to the full-fare passengers.

KH: There has been an enormous upheaval in the last few years and the long-term position is still clouded. In effect what has happened is that fares between the UK and Australia were reduced to some extent in 1977 but fares to continental Europe were not then reduced to the same extent. This was the first of the advance purchase fares. Australia-London fares in 1982 will be about 40 per cent higher than in 1977 and in that time the CPI should have moved up by about 45 per cent. So relatively, the fares are still attractive.

Fares to continental Europe are up considerably less because they were higher in 1977 and yet that is the market that tends to be down. But in 1977 fares between Australia and Asia were pretty high and when they were pulled down it caused a complete redistribution of traffic. Although it is not totally clear yet, we are very much of a view that the big growth in the future will be in the Pacific, but there will always be a continuous interest to the UK and Europe for fairly obvious reasons.

We do not see the sort of growth we had in the early 1970s when the so-called $700 fare was introduced. I think we had a 400 per cent increase in traffic over the next four or five years. But we do not see that sort of thing happening again.

JS: When you say the Pacific, you include Asia?

KH: I include Asia. The whole of the Pacific rim.

JS: Specifically, what would you see as your developments in that area? More services to high-density tourist areas such as Fiji or is there a saturation point you can reach in tours to Pacific/Asian destinations?

KH: I think there is a continuous interest in package tours to Asia, Fiji, Noumea, New Zealand and so on. Our experience, and I think the industry experience, is that there will tend to be changes in destination interest over time. People will find new destinations. But generally, I would think that area will remain fairly strong because it is reasonably close and in absolute terms, the airfares will always be reasonable. And because Australians perceive that part of the world as an area where one goes for a 10-day holiday or a three-week holiday. They still perceive Europe as a place that one goes to for two or three months. So that the total cost of Europe is, in absolute dollar terms, high.

JS: Would you also see more diversity in the bargaining for routes between – obviously governments – but between yourself and other carriers into different areas in Australia – the Darwin, Townsville range?

KH: I think that is inevitable. In a few years, we will see a number of our friends in the north beginning to take an interest in places like Townsville and possibly in a few years when there is a better airport, at Cairns. Adelaide will obviously be of interest to everybody.

JS: What about the current situation with the blood shops in Singapore and other Asian countries where, I am told, you can buy a ticket on Qantas as cheaply as on any other Asian carrier? Do you see that as a continuing phenomenon of the way business is done in those areas?

KH: Yes, I have a little experience of the Asian area and generally the way business traditionally has been done in Asia is that prices have been set somewhat artificially and then the consumer thinks it is Christmas because he gets a discount.

In recent years, because of overcapacity between Asia and Europe and a downturn in traffic, of course, it has become a bit of a blood situation, as you say. The prices that we sell in Asia are about the same levels that are sold by the better airlines – Singapore Airlines and some of the European airlines. We do not get down to prices offered in the market by others – Aeroflot, Sabena and some of the others. That is not necessary.

JS: There is a situation of some of these Asian airlines having very strong support of their governments and I have heard Qantas pilots complain that they get very unfair treatment from air traffic controllers, ground controllers, and airport staff. All sorts of stories are told about what is offered to passengers in transit lounges to switch their bookings. Do you think that is a significant problem to your airline and is it likely to be a continuing one?

KH: There will always be that sort of problem. I do not think it is significant. I think it tends to be exaggerated and I know of no restrictions on Qantas for example in using the facilities in the new Singapore international terminal.

JS: I am not thinking so much of official restrictions as petty under-the-table hamstringing.

KH: No. I think that criticism is somewhat unfair.

JS: What about full revenue passenger services? Do you see a major growth in the business class type of traveller? Or are a lot of business people still flying on a pure full economy fare, rather than business class?

KH: No. There is a very clear trend to business class for the full-fare passenger to move out of the economy. I think that is a worldwide trend now, except between the pure holiday destinations like Bali and Fiji. Certainly, in northern Europe, the UK and particularly between Australia and North America there is a very strong move to the business class product. It has been very useful.

JS: Has there been a move from first to business class?

KH: Very, very small. The first class traffic has basically held up and the business class has grown.

JS: On the property front, the figure of $100 million was brought about as a possible figure for the hotel and this building. In the event you got somewhat less than that, was that what you expected to get?

KH: Yes. We were satisfied with the price. The $100 million was a figure which appeared in print but I do not really know where it came from.

JS: Are you moving to a more general policy of selling real estate and perhaps leasing it back?

KH: No. As I said earlier it is simply a question of looking at assets to see if they perform. We did not sell the hotel because of any immediate cash shortage. We sold it because it was not performing. The choice really lay between getting into the hotel business a big way, which would cost a lot of money, and our capital requirements over the coming years will be substantial – they always are in this industry for aircraft alone – and it did not seem sensible to go on with one hotel which was 20 years old and by our standards not performing. Maybe a chain owner can make it perform.

JS: On the industrial situation, things are not bad at the moment, but following that rather remarkable episode last year with the cabin staff on strike and other staff manning flights and so on, a lot of people felt the airline had those people by the throat at the end but now they are back to where they started and an opportunity to deal very firmly has been allowed to slip away.

KH: I have heard that view, but the reality is that the relationship between the company and all its employee populations is very important. The cabin crew have by and large performed extremely well since that unfortunate episode last year. The quality of service on board the aircraft has not been better for a long time.

JS: I gather it may have come down to a case of individual personalities.

KH: There will always be some of that, of course. Cliff Dolan and I in the end tried to settle the whole matter on the basis that there would be no discrimination. But it is always difficult to control that sort of thing totally.

JS: Are you making any changes in your approach to staff relations as a result of those series of disputes?

KH: Yes. We made some changes. We made the operating managers of the company directly responsible for their industrial relations and we have involved them in all discussions with union and employee groups we are also meeting the ACTU and the unions on a consultative committee basis every three months or so.

JS: You recently asked for $100 million in increased capital base from the Government and got $25 million. Must an increase in your capital base come from the Government or are you in any way able to use funds from other sources?

KH: At this time it would have to come from the Government. The international industry, with the exception of some American carriers and one or two other arrangements in Europe, is basically a government industry. It is not an industry of free entry or free exit or any of the other things that go with a domestic market.

JS: What would be the immediate effect of a further $75 million injected into your capital base?

KH: A reduction in our debt burden. Or an improvement, directly or indirectly, of 16 per cent on $75 million.

JS: So you would generally wind down your gearing on these matters.

KH: Gearing is a problem, not just for us, but for most international airlines.

JS: Where would you be in the pack?

KH: Higher than a good number, unfortunately. We used to keep level with them. 70130 is not unusual in the industry but 80/20 and certainly 87/13 is much too high.

JS: That is your current gearing?

KH: Yes.

JS: Sydney airport. Qantas has made a minor noise that it may be forced to look at placing some facilities elsewhere. The figure has been quoted that you pay your staff at Sydney airport $150 million per year. How close or how serious is the problem of lack of capacity or restrictions at Sydney Airport?

KH: The restrictions at this time for international operators are basically around the peak periods. The morning. There is· a worry that unless steps are taken to improve that situation, aircraft just will not be able to get in and more movements will not be absorbed by the airport in the morning.

There is no suggestion of Qantas moving any of its facilities from Sydney airport for the simple reason that the capital investment is enormous and one does not just pick up hangars and workshops and all those facilities and move them somewhere else.

I think the position also will be somewhat relieved – it must have been relieved to some extent already – by greater activity at Brisbane. Townsville will not have too much of an effect on Sydney but when Adelaide is open it will have some small effect on Sydney Obviously some traffic will move directly to and from Adelaide.

But yes, Sydney is a worry and hopefully, this problem can be resolved and we can all see where we are going.

JS: Do you think this small additional runway they are talking about, for aircraft up to F-27 size, will be a significant benefit?

KH: Anything that would ease the congestion would be a benefit.

JS: Do you think easing or bending curfews would have an effect on certain of your operations?

KH: A marginal effect. It would be convenient and economical if we were able to bring an odd aircraft that runs late into Sydney after the 11 p. m. curfew. But essentially our operations are governed by what customers want and I do not really see them wanting to fly in and out of Sydney at two and three o’clock in the morning. It is not an enormous problem.

JS: You do hear horror stories of flights having to wait hours on the ground in Melbourne waiting for the curfew to lift in Sydney. I understand that for landings over Botany Bay, aircraft can use virtually no reverse thrust and that on occasions they have put aircraft in there without waking a soul.

KH: That is certainly our view – that there could be at least a limited relaxation of the curfew to accommodate aircraft that are perhaps running a little late.

JS: The recent increase in flying – obviously the aircraft you had hoped to sell you have now put back into service. One set of figures quoted a 42 per cent increase in capacity with 2600 seats per week.

KH: Total capacity is up nothing like that. We are not increasing capacity at all between here and the US. There is probably about an overall system-wide 1 0 per cent increase in capacity.

It is mainly in Asia where the growth of traffic has been very strong. In the year to end March 31, we experienced growth rates between Australia and Asia of between 15 and 25 per cent. Obviously, we have had to accommodate that. We also felt we had to restore some of the ground we lost a few years ago. Australia in the end really did what the US has done. It traded to some extent hard rights – traffic rights – for soft rights – low fares.

We have restored a lot of that trading situation in recent months.

JS: Are there indications that you will break even or better on the operation of these aircraft?

KH: Yes. Every single operation has been looked at and everyone will clearly improve our position.

JS: One might then ask, why were you selling them? Is this a result of recent improvements in the market?

KH: Well, when we looked at selling them, we were looking at what we call older aircraft. I suppose by industry standards they are not really older aircraft at all. After all, we have no 707s or DC-8s or 727s to replace. It was a different situation. We were looking at very strong growth to Europe and we had two problems – firstly we had some surplus aircraft, secondly, we had a big growth to Europe.

What happened was the Europe traffic declined and we had to take off some capacity. What we have really done is to re-deploy some of our Europe capacity to Asia, rather than have any more idle aircraft.

JS: Will there be any further attempt to sell these aircraft before there is any sign of improvement in the market for second-hand 747s?

KH: I do not see any real opportunity to sell aircraft in the next 12 months or so. The market is stagnant for second-hand aircraft. One or two people, such as British Airways, have sold some aircraft but I think you will find they have been brand new aircraft.

JS: They sold their freighter at a knockdown price.

KH: Right, and they sold a couple of aircraft off the production line to the Malaysians.

JS: At the same time though, the price of new wide bodies is climbing steadily. This would probably mean that your fleet over the next few years will on average be older than you had planned it to be. Does that indicate a move to wring more out of your aircraft than originally planned?

KH: Yes. I think the difference is that what we are now looking at is a situation where money is very expensive and where new 747s within a couple of years will be about $100 million each.

In those circumstances we really have to look again at our situation and ask are the fuel savings that we get from a new aircraft with new engines really offsetting the very substantial cost of funding the acquisition of new equipment.

JS: Is there any chance of re-engining some of these older aircraft with some of the new Pratt and Whitney engines?

KH: Yes. There is a chance of reengining some of them and we are having a look at that.

JS: That would mean in effect you would have . . .

KH: The best of both worlds . . .

JS: New Rolls engines on some aircraft and new Pratt and Whitney on others. You could not put new Rolls engines on old Pratt aircraft.

KH: No. They are too heavy to put on the lower gross weight aeroplanes.

JS: So this is the newest Pratt and Whitney engine. The one SIA is going to.

KH: Yes.

JS: Have you any idea when there might be a decision on that?

KH: The engine is not available until 1984 so 1983-84. There is time to look at it. It has not been built yet so there is also a need to look at it.

JS: On the operation of 747 SPs, why does Qantas feel bound to serve Wellington? It is a New Zealand port and according to one estimate, there are more international travellers coming out of Canberra and having to fly domestically to Sydney, than from Wellington. I am aware there are other uses for the SPs but it is still a decision a lot of people have not reconciled.

KH: It is profitable. The SP, particularly with Qantas, is a single operator able to adjust the capacity to the demand, so it is quite possible to operate profitably to Wellington.

JS: So you have high load factors on that sector.

KH: Yes.

JS: Are they long-range versions of the SP or are they adapted more specifically for special performance shorter-range work?

KH: Our two SPs provide us with a great deal of flexibility. We do not need the extremely long range at this stage simply to fly Townsville-Honolulu but if we ever do need it is only a matter of paperwork and a small amount of money to upgrade the weight of the aircraft. The structure is all there. It ·is just simply certificated for a lower weight until we need the higher weight. We could well need that in the future.

JS: Would you see any prospect of increasing the SPs as a component of the fleet?

KH: No. I think at this stage the two cover off the fringe operations very nicely. They handle the Townsville airport situation and the difficult Wellington airport situation and they give us the flexibility to do other things. For example, if there is not enough traffic to support a big aircraft between Adelaide and some destination then the SP covers that gap rather nicely.

JS: What about this much talked about second type for Qantas? I know your press department cringes every time someone mentions it because they have Boeing and Airbus on the doorstep again the next day. What would be the earliest possible date Qantas, if it ever did, went into a second type of aircraft?

KH: Well, that is going to depend on a lot of information we do not yet have about the types of aircraft. We have looked over the years at DC-10s and over more recent years at L. 1011s. At one stage towards the end of last year there was some suggestion that there might be a re-engined 1011 but the development cost was $500 million US and Lockheed dropped out of course.

There are some indications that Douglas have been encouraged by the Lockheed dropout and are looking at what they might do with the DC-10 in the future. But at the moment I think the Douglas order book is basically dependent on military tankers.

The 767 has only fairly recently taken to the air and is undergoing trials and the A310 is in the same situation. I am not incidentally being critical of anybody who buys aeroplanes before they are flown. If you want to buy an aeroplane for use over relatively short ranges you can be confident that an A31O or a 767 will do it. But our interest is – will the aircraft of that type have the growth of weight and payload-range capability generally to do some of the routes like Adelaide-Bali for example.

Until all the tests have been completed on these new aircraft, we do not know the answer to the question. So we are just having a look at it.

JS: I gather your director of flight operations has flown both the 767 and the A300.

KH: Yes.

JS: I know the word ‘options’ covers a multitude of sins but it was suggested to me at one stage that Qantas might be close to putting options on one or other of those aircraft.

KH: Not yet.

JS: Obviously the idea has been floated to you by the manufacturers. Has it been of any interest at this stage?

KH: Yes. About every two years, our regular practice is to do an update study on the various aircraft types that are available or are becoming available, largely to keep ourselves informed. The position at the moment is that it is hard to see, and the manufacturers, even Boeing for example, who make both the 767 and the 747, cannot show us that the 767 is better in seat mile costs than the 747.

But the 767 is in the air and there are reports on fuel consumption that manufacturers’ guarantees are being bettered and fuel consumption is lower than it was first thought it would be. So we are having a careful look and evaluating this data.

But we certainly are not anywhere near talking about options.

JS: Nevertheless, on some of those thinner regional routes, a smaller aircraft would obviously permit you to operate a service viably where you could not do so with a 747. I know the review of the ICAP policy, which would possibly have opened the way for further domestic airline operation on regional routes has been put back. How much of a threat do you think the domestics are moving into some of the regional routes at the moment, partly because of the way they can match their equipment to volume on certain routes, but also in general terms?

KH: I think that has been settled for the time being but we are more interested in looking at it from our own point of view than from the point of view that domestics might pose – whether the threat is real or otherwise.

One of the issues clearly is that some of the short haul destinations, and we were talking about them earlier, are very much holiday destinations and travellers like Noumea and Fiji are much more interested in price than in high frequency. The volume of business traffic on those routes is pretty small.

We do not want to finish up with an aircraft type that may fit some of the markets but nevertheless means the price of the airfare has to be put up considerably. This has been the problem with some of the smaller aircraft in the past.

JS: So you do not currently feel there is any chance at all of domestics moving on to regional routes currently operated by Qantas?

KH: Currently, no. Because there is to be no inquiry. But who knows what will come out of the deregulation inquiry into the domestic industry? One can hardly sit around on one’s hands.

JS: Do you believe there is significant potential for them to develop other small regional routes that you are not currently serving?

KH: Well, the regional routes that one might look at – Asia is pretty well covered off I think and other routes involve places like Honiara, where Ansett has an interest, and Vanuatu where we are quite happy for Ansett to operate. Perhaps places like Asia. All these particular points have very small airfields and very small traffic volumes. So yes, the answer is that I think the Ansett plan at the moment is to use a 737 to cover the Apia and Port Vila routes. And that may well expand to one or two places in the Pacific, but probably under the rights owned by those various island states.

JS: Has TAA made any firm proposition to you on the lease of an Airbus A300?

KH: No. TAA has simply said they could have some spare wide-body capacity and asked if we are interested. I believe Ansett expects to have some spare 767 capacity and of course, we have some spare 747 capacity which we have said they might be interested in.

JS: Is there any chance of the old thing of domestic passengers being carried in your jets – even if it is under domestic ticketing?

KH: The two airline agreements cancel that out unless the domestics were to hire some of our capacity and fly it as TAA or Ansett capacity. Obviously with the downturn in the domestic market, and some surplus capacity of their own, that is highly unlikely.

JS: Coming back to the original point of the change of direction in Qantas, would it be fair to say that in ICAP the airline willingly or otherwise went down the wrong road or was heading into storms or mountains, and has now with some relief made a change of heading?

KH: Yes. As a broad general answer. But I think you also have to look at the exact opposite policy of deregulation that the US adopted and it has run into exactly the same sort of headwinds and weather problems. The reality is that we live in a world that is full of airlines, most of which are seen as important flag carriers and national enterprises by their governments and everything has to be negotiated.

Obviously, it is a multilateral world. No one’s policy can be enforced by anyone else.

JS: Although you are the national flag carrier here you do not get quite the same moral backing that certain other countries might give their airlines.

KH: I think that is a fair comment. I think that also comes back to the political system of Australia – the fact that governments are sensitive to consumer interests, as they should be and the airline’s interests cannot be put above all other interests.

In some other countries, consumerism is not really a word that has been spelled yet.

JS: Has this in effect brought the airline back to where it was before ICAP?

KH: Yes. Pretty much. As US deregulation was a diversion from a course. And they are coming back very quickly to a form of regulation, simply in recognition of the fact that there is not a free market out there.

JS: Are you going to make a profit or a smaller loss in the current financial year?

KH: I think it will be difficult to make an operating profit. We might make an overall profit because we carried the effects of the strike into this financial year. But we are doing better. No question that we are doing better. JS: Compared to airlines of the world. . .

KH: It is a bad benchmark, isn’t it, to compare yourself to the enormous losses that are going on elsewhere. But it is a matter really of holding on. The whole industry is in all sorts of trouble. Losses, as an industry, are ridiculous. And it is an industry where the return has never been very high.

I was looking at some figures in a meeting in Africa a couple of weeks ago and I think the industry needs to find something between 90-140 billion US dollars to cover re-equipment costs this decade.

That requires an industry return of 7. 5 per cent after tax. In the heyday of the 1960s, the industry averaged 2. 7 per cent after tax.

JS: Not a very encouraging set of figures by any means.

KH: Frightening.

JS: So your trend of moving toward slightly older aircraft – without having to replace narrow bodies – is part of an industry-wide development?

KH: Yes. In many other countries, aircraft like DC-Ss and 707s have to be replaced because of noise restrictions which will be brought down in the 1980s. Aircraft like DC-9s and 727s will not go on forever. So those sorts of aircraft absolutely have to be replaced.

JS: I have not asked you about cargo. There was a point a few years ago when Qantas almost seemed to lose interest in cargo. Since then there has been a major resurgence in cargo. What with Combis coming and going I get the impression there may have been a certain waxing and waning of interest in cargo and an uncertainty about how large a portion of the airline’s revenue it should be expected to provide.

KH: I do not think it will exceed about 20 per cent of our revenue. At the moment it is a little below that. And the directional problem remains in this country.

Volumewise we are shifting a reasonable amount of cargo out of Australia but a lot of it is low-yielding meat cargoes. That is basically the problem – a directional problem. Nevertheless, we are building a new facility at Sydney Airport and we will also shortly move to establish a more discrete cargo operation within the company.

JS: In terms of management?

KH: Yes. Within the marketing division, a cargo group is separate from the passenger group because it is big enough to stand that now.

JS: That is a fairly late development for Qantas compared to a lot of other major carriers.

KH: Air cargo in some has had a distinct stream. It is a bit of a mixed bag. It has not in all carriers. It has tended until fairly recently to be the poor cousin to the passenger market. Obviously, that cannot go on. It is big enough to warrant more attention than that.

Next Issue . . .

•  Ah! Remember the flying boats? Who doesn’t, great aircraft and a great story on them coming up for our September ‘In Australian Service’ feature. Includes two pages of brilliant colour and a cutaway. Only in Australian Aviation.

• Though the government refuses to admit that it will eventually purchase STOVL aircraft for HMAS Australia the fact remains that ultimately the carrier will have to be equipped with such an aircraft. Will the RAN ultimately opt for the English Sea Harrier or the American AV-8B.? Both are totally different aircraft in role concept so let Roy Braybrook brief you on these two unique aircraft in our special September feature.

• Every month new commuters, or regional, airlines seem to come and go in this vast land of ours. Our annual Regional Airline Directory surveys the vast number of registered commuter operators with a review of the mergers, arrivals and departures of third-level operators in the past year. Exclusive to Australian Aviation.

• General Aviation fans will have their hands full with an in-depth profile of the Piper Cheyenne family of turboprops. More than a thousand Cheyennes have been sold worldwide and the arrival of the latest marques, the Ill and the XL provides an ideal opportunity to report on this aircraft.

• Our regular features are of special interest in September. ‘In Active Service’ examines the Fleet Air Arm, ‘Technology Explained’ looks at integrated flight and fire control, which gives fighter/attack aircraft the ability to destroy targets while conducting high-G defensive manoeuvres. We also host the third and final part of Let Your Ears Have Wings, our exclusive radio band directory. Don’t miss it!